The incident occurred on Friday when a member of the al-Awda Brigades, part of Palestinian President Mahmud Abbas's Fatah movement, was refused permission to visit his jailed brother.
The fighter shouted threats at the police and was then beaten by them before he called in others from the group, six of whom began firing at the station, a member of al-Awda Brigades said.
Return fire from police wounded two of the armed men, he added.
A policeman was also wounded and additional back up forces were called in, witnesses said.
Another brigades member said the incident erupted after police refused to apologise for beating up their man. A policeman at the Nablus station declined to give details other than to say, "We were attacked by fighters".
Mahmud Abbas has been trying
to strike a delicate balance
Abbas has been trying to strike a delicate balance between reining in resistance groups through persuasion and fending off calls from Israel and the international community for a crackdown.
This week, tensions between the Palestinian Authority and the al-Aqsa Martyrs' Brigades, a resistance group linked with Fatah, erupted into a confrontation in the nearby town of Jenin.
The fight broke out even as the Palestinian interior minister was visiting Jenin.
A popular local fighter, irate that the minister had come to the town without his permission, opened fire on a building where he was holding meetings.
In a separate incident, an explosion on Friday rocked the Rafah refugee camp in the Gaza Strip, wounding three people, including two 14-year-old boys and a six-month-old baby, witnesses said.
Hospital officials said the two older children were playing with an old explosive device when it went off.